Carolinas HealthCare nets $387.6M so far in 2012

Carolinas HealthCare System netted nearly $387.6 million in the first nine months of the year, up from $43.8 million during the comparable period a year ago.

For the first nine months of 2012, the health-care system’s net operating revenue rose to nearly $4.9 billion, up from roughly $4.6 billion a year earlier.

The health-care system reported operating income of $124 million, down from $143.8 million.

Those figures include results from all 38 hospitals owned, leased or managed by Charlotte-based Carolinas HealthCare.

“So far, 2012 is on track for what we expected it to be,” says Joe Piemont, president and chief operating officer. He spoke Tuesday at the quarterly meeting of the system’s board of commissioners.

Piemont notes the health-care system has had its ups and downs in 2012. More patients are choosing the health-care system’s facilities.

But the health-care system saw its payer mix shift to include more Medicare and Medicaid patients. Both government programs pay less than the cost to provide care.

That places pressure on already thin margins, Piemont says. Carolinas HealthCare is still waiting to see how health-care reform will affect reimbursements and its operations long term as more people gain access to health care, he adds.

The system reported adjusted discharges — a calculation that gauges patient volume — grew 14.6 percent in the first three quarters of 2012.

Carolinas HealthCare only provided information for patient visits for its primary-enterprise operations. Those include Carolinas Medical Center, Levine Children’s Hospital, CMC-Lincoln, CMC-Mercy, CMC-NorthEast, CMC-Pineville, CMC-Union and CMC-University, as well as the system’s physician and rehabilitation services.

That increase was driven by a rise in the volume of surgical patients, emergency-department visits and outpatient revenue. Visits to ambulatory physician practices climbed 7.6 percent over the nine-month period.

Carolinas HealthCare reinvests any surplus generated by operations into new clinical programs, facilities and capital improvements.

It has invested $293 million in construction projects and other major improvements at its primary-enterprise operations during the first nine months of 2012.

Piemont says the health-care system has experienced growth because of those investments.

“Our tried and true approach to care delivery has to be leveraged. We have to find ways to become much more efficient,” Piemont says.

That includes utilizing telemedicine and advanced-care practitioners, such as nurse practitioners, who can serve as a patient’s primary health-care provider. He notes technology will play a huge role moving forward in efforts to improve quality and control costs.

That is critical as the system continues to face rising bad-debt, charity and uncompensated-care costs. Those expenses rose 24.4 percent to $730 million during the first nine months of 2012 at facilities the health-care system owns. That’s up from $586 million during the same period last year.

Those unreimbursed charges accounted for 9.4 percent of gross patient revenue during the nine months.

“We don’t have a lack of patients. We have a growing number of patients who simply can’t pay for the cost of care they’re provided,” Piemont says.

No figures were provided for the entire health-care system.

On Tuesday, the board of commissioners approved a 2013 budget for its primary-enterprise operations that anticipates total operating revenue will grow nearly 7 percent to $4.4 billion.

Adjusted discharges are expected to increase 5 percent.

“I think it’s a realistic budget,” Piemont says.

He notes the budget is part of a five-year forecast that takes into account issues such as $64 million in Medicare cuts because of sequestration. There are still many uncertainties, adds.

The health-care system expects unreimbursed charges of $1.1 billion in 2013, which is 9.5 percent of gross patient revenue.

The health-care system also plans $457 million in capital expenditures in 2013. That includes expansion of facilities, replacement of equipment and capital needs. That includes a planned behavioral-health hospital in Davidson, an expansion project at CMC-Union and free-standing emergency departments in Harrisburg and South Charlotte.

The budgeted operating margin is $62 million or 1.4 percent.

“It’s very thin,” Piemont says.

Carolinas HealthCare is the largest health-care system in the Carolinas and the second-largest public system in the nation. It owns, leases or manages 38 hospitals in the Carolinas. It has more than 48,000 full- and part-time employees and 1,500 physicians.